Moderate-aligned members of the NSW Liberal Party's executive committee have reportedly decided to abstain from a vote on using emergency powers to guarantee Mr Kelly's position.

Mr Kelly, a vocal conservative, was facing a preselection challenge from moderates in the federal seat of Hughes.

However, Fairfax Media reports the state executive will vote to cancel preselections, meaning he will be re-endorsed.

The peace deal comes after Mr Kelly effectively threatened to bring down the federal government by defecting to the crossbench.

Mr Turnbull urged state executives not to yield to the threat, saying giving in would be "the antithesis of good government".

Mr Turnbull argued party members in the seat of Hughes should be given the chance to have their say.

"That is not the sort of threat to give into. If that threat has been made, that is effectively blackmail," the former he told reporters in Sydney on Monday.

Mr Turnbull also called on Prime Minister Scott Morrison to call an early federal election to save NSW Liberal Premier Gladys Berejiklian from defeat in a state poll.

He had planned to hold a March 2 federal poll ahead, of the NSW state election later that month.

"My view is that it would be manifestly in the best interests and prospects of the Morrison government to go to the polls as soon as it can after the summer break," he said.

Earlier, Mr Turnbull did not deny telling state executive members that Mr Morrison is "just trying to keep his arse in (prime ministerial limousine) C1".

"Plainly, the prime minister's determination is to stay in government for as long as he possibly can," he told ABC radio.

Former deputy prime minister Barnaby Joyce, who fell out with Mr Turnbull earlier this year after having an extramarital affair with an employee, pulled no punches.

"It's really disappointing what Malcolm Turnbull's done, he's destroying his own legacy by his own hand," he told Seven News.

"We gave him loyalty, we backed him until the end, and now he's just really 100 per cent committed to getting rid of the coalition."

Anxious NSW Liberals are genuinely concerned their federal colleagues could cost them the state election in March.

"The feds are poisoning us," one senior state Liberal told the Sydney Morning Herald.

Deep divisions within the party have been compounded by a disastrous Victorian election, the defection of former federal Liberal MP Julia Banks and the resignation of Victorian Liberal Party president Michael Kroger.

Mr Turnbull denied he was trying to stir trouble.

"The proposition that I am responsible for the government's electoral woes is absurd," he said.

"I'm an Australian citizen, I'm a member of the Liberal Party, and I'm entitled to express my views."

Australian Associated Press